| MMRecap
for November 24th
Last week we had a marathon of
17 economic reports released. Monday kicked off with November’s New York
Empire State Manufacturing index. The index rose to 10.2. Not bad,
considering that the previous report came in at 6.2.
Twin reports, industrial
production and capacity utilization, both disappointed. Production fell 0.1%
from the +0.8% from the prior report, while capacity utilization edged down
to 78.9% from 79.2.
When the markets closed,
results were mixed, with no big winners or losers.
The yield on the 10-year note rose 2 basis points to close at 2.34%.
On Tuesday the producer price
index came out, and we actually saw some movement in October. It rose 0.2%
from -0.1% in September. The PPI core, which eliminates food and energy
prices, also moved up to 0.4% from 0.0%. The final report came from the NAHB;
its index jumped to 58 from 54 in October. That was good news.
Wednesday was a relatively
calm day, as only two reports were published -- building permits and housing
starts for October. Housing starts fell to an annual rate of 1009K, likely
weather-related. This was down from the 1038K starts in September. Building
permits had a more impressive result, as they jumped to an annual rate of
1080K -- an increase of 49,000 units from September.
There were no expectations
regarding Wednesday’s FOMC meeting, but it sounded like it might have gotten
a little dicey. The whole idea behind QE2 was to lower interest rates as well
as lowering the percentage of unemployed. Low interest rates did perk up the
economy, but the unemployment rate has a ways to go, and some FOMC members
seem to feel the cut off was premature. Either way, the Fed will make rate
hikes in the future -- likely beginning in 2015.
Thursday featured seven
reports, all close to predictions. First-time jobless claims for the week
ended Nov.15 led off at 291K, 2,000 fewer claims than the previous week.
Continuing claims fell by 73K to come in at 2330K for the week ended November
8.
Consumer price indices for
October followed. The bare-bones CPI dipped to 0% from 0.1% in September.
Meanwhile, the core CPI, which eliminates food and gas prices, edged up 0.2%
from 0.1% the previous month. Still no inflation worries here!
The next report showed
existing home sales jumping to a higher-than-expected annual rate of 5.26M
units in October; that’s 80,000 homes sold.
If the Philly Fed Index was
like any other report, it would have set the markets on fire. It is an
important report concerning manufacturing in the eastern seaboard area, but
it’s not in the same class as Chicago, for instance. However, in November the
index rose to 40.8 from 20.7. This is a very notable increase which shows
that manufacturers are humming along. This is a good sign for the economy.
The final report for the week
was leading economic indicators for October. It rose to 0.9% from 0.7%, but
it has zero impact on the market.
There were no economic reports
issued Friday, but there was news that sent stocks to record highs, again.
The feared recession in Japan is now a reality, but a surprise rate cut by
China’s central bank, the first in more than two years, sent the European
markets up; the U.S. markets followed.
Despite the short Thanksgiving
week, there are several reports being released. No reports come out today,
and tomorrow we have just a few, starting with the second estimate of the Q3
GDP. The markets expect that report to come in at 3.3%, while the briefing
forecasters are thinking more along the line of 3.0%. This compares with the
3.5% reported from the prior report issue. Next in line is the Case-Shiller
20 city index for September. The prognosticators are expecting a slight
downturn in this number to anywhere between 4.2% and 4.6% compared with the
5.6% that was reported previously. We also get the consumer confidence
report, which is looking good right now. The report is expected to show our
confidence level rising to 96.0 in November, up from 94.5 from October.
Wednesday we’ll get some
reports that normally come out on Thursday, in addition to Wednesday’s
reports. We’ll start the day with the initial and the continuing jobless
claims reports. Initial claims are expected to go down, a result of temporary
employment during the holiday shopping season. It is anticipated that initial
claims will be at 285K for the week ended November 22, down from the 291K the
week before. Continuing claims may go up to 2350K for the week ended on
November 15, compared to the 2330K the week prior.
The durable orders report for
October is next. A 0.7% decrease is expected. This follows a 1.3% decrease in
September, so it’s a little bit better. The durable goods ex-transportation
report follows and is expected to show an increase to 0.3%, which is better
than the -0.2% decrease from the previous report.
The personal income report for
October looks like we might be making a little more money. The forecasters
are predicting this number to rise between 0.4% and 0.5%, compared to 0.2%
from the prior statement. Personal spending is also predicted to be on the
upswing, showing that we might be spending as much as 3% more in October.
The Chicago PMI report comes
out next and covers November. This report might be a little less than the
previous report, coming in around 65.0 compared with the 66.2.
Continuing on Wednesday, the
final University of Michigan sentiment report for November is released. Only
minor changes are expected, as the report might come in at 90.5 versus the
89.4 on the previous report.
The next announcement is on
new home sales for October. There’s a huge discrepancy in predictions from
the “experts.” The markets are anticipating an increase to 469K over the 467K
from September, while the briefing forecasters are predicting a major
decrease to 450K new homes sold. It’ll be interesting to see the actual
result here. Pending home sales also demonstrate another discrepancy between
forecasters. The markets would like to see pending home sales up by 0.8%
while the briefing guys are thinking more like 0.5%. Still, these numbers are
an improvement from the 0.3% last reported.
We want to wish all of you a
Happy Thanksgiving. Be safe!
|
|||
|
|||
 Realtors' Lender
of Choice! |
|||
|
Copyright
2008 The Daily Communicator
|
Monday, November 24, 2014
Money Market Recap and Forecast
Monday, November 3, 2014
|
MMRecap
for November 3rd
Last Monday was a relatively
quiet day, with only September pending home sales released. They rose 0.3%,
which was better than the previous -1.0% decline; it was, however, far short
of expectations, which ranged from 0.5% to 1.0%.
Although the Dow gained 12.53
points, that was about as good as it got. The Nasdaq closed up 2.22 points,
and the S&P 500 fell 2.95 points. The 10-year Treasury slid to 2.27%.
Tuesday gave us the report on
durable goods; it came in far better than the previous report of -18.3%. This
report showed durable goods down only by -1.3%, a disappointing number when
compared to the hopes of the forecasters that durable goods sales would
improve by 0.5% or 0.6%. Orders for durable goods ex-transportation fell
-0.2% on this report, far lower than the 0.7% from the prior report.
Case-Shiller reported that
home sale prices rose 5.6% for the month of August. This was slightly down
from the 6.7% rise in prices from July. We also had the consumer confidence
report for October that came out Tuesday. Good news here! The report showed
an increase in consumer confidence with a score of 94.5. This was a nice jump
from 89.0. All this good news had a positive effect on the markets as the Dow
rose 187.81 points, or 1.12%, the Nasdaq gained 78.36 points, or 1.75%, and
the S&P 500 closed up 23.42 points, or 1.19%. The 10-year yield rose 3
basis points to finish the day at 2.30%.
Wednesday morning the Fed
announced that QE3 was finished, done, over with! That was the only report
that counted, and the markets reacted a bit, but nothing drastic. When the
markets closed, the Dow was down 31.44 points, the Nasdaq closed at -15.07
points and the S&P 500 slipped slightly, closing at -2.75 points. The
10-year yield rose 4 basis points to end the day at 2.34%.
On Thursday we had the usual
reports on initial and continuing jobless figures, as well as the GDP report.
Initial jobless claims came in at 287K -- 3000 more new claims than the week
before. Continuing claims, those receiving unemployment benefits for a second
or more weeks, also went up, and the results for the week ended October 18
came in at 2384K, compared with 2355K the prior report.
The GDP report for Q3 was
disappointing as the economy only grew 3.5%. This was better than had been
forecasted but down from the 4.6% from the previous quarter. This news didn’t
seem to affect the markets much, as all of the indices were up for the day.
When the bell rang on Thursday, the Dow was up 221.11 points, or 1.30%, the
Nasdaq rose 16.91 points, or 0.37% and the S&P 500 went up 12.35 points,
or 0.62%. The 10-year yield dropped 2 basis points to close at 2.32%.
Friday was a busy day in spite
of it being Halloween. Lots of reports came out to end the month. The first
report was on personal income for the month of September. Although it was up
by 0.2%, that was less than the expected amount of 0.3%. Not a big deal. On
the other hand, personal spending took a dip to -0.2%, after a +0.5% increase
in August. So apparently the people who went out and spent some of their
income in August took a breather in September.
No surprise on the PCE report,
which came in as expected for September and remained at 0.1%. The employment
cost index for Q3 held at 0.7%. This has been constant for the last two
quarters. The Chicago PMI had good news and reported an increase to 66.2 for
October. This is up from the 60.5 reported for September. Finally, the month
ended with the Michigan sentiment report for October. More good news, as the
report inched up to 86.9 from 86.4. Though not earth-shaking, an increase in
confidence is always a welcomed sign. The markets were happy last Friday, and
all of the indices ended up. The Dow closed up 195.10 points, or 1.13%.
Nasdaq closed up 64.60 points, or 1.41%, and the S&P 500 closed up 23.40
points, or 1.17%. The 10-year yield rose 3 basis points to close the week at
2.35%.
According to the MBA, mortgage
applications for the week ended October 24th decreased by 6.6% on a
seasonally adjusted basis from the previous week. Refinance applications also
decreased by 7% from the prior week. The refinance share of mortgage activity
remained unchanged at 65% of total loan applications. The average contract
for a conforming 30-year fixed rate mortgage increased to 4.13% from 4.10%.
Although Halloween is over, we
have another scary week coming up, as there are 16 reports scheduled. Some of
these reports are market movers, some aren’t.
Today’s first report is the
ISM index, a look at manufacturing in the U.S. during October. It had
previously dipped to 55.7 from 56.6. That will be followed by the report on
construction spending in September, which already made a good recovery from
August, rising 0.7% vs. 0.8% the previous month.
On Tuesday we get a peek at
the trade balance, which had been edging down in an effort to reduce the
$40.1B deficit. It was slowing a bit, but the last couple of months it has
returned to its evil ways, and that is expected to continue. The next report
is factory orders for September which are predicted to drop -0.5%; but that’s
a lot better than the August report of -10.1%.
Because the employment numbers
come in on Thursday, the ADP employment change report for October will be
released Wednesday, along with the October ISM index on the service sector.
This is a far less important report than the manufacturing ISM. Neither one
of these reports generally affect the markets much.
On Thursday we have the
initial and the continuing jobless claims reports. Thursday’s final report
will be on Q3 productivity and unit labor costs. Last month the productivity
level came in at 2.3%. The analysts are predicting this report to show only
about 1.5%. The unit labor cost is expected to go up to 0.9% from the
previous -0.1%.
Friday is the biggie, with the
unemployment report for October to be released. Unemployment dropped below
6.0% (actually it came in at 5.9%) in September for the first time since
July, 2008. It is expected to stay about the same. Next up is the nonfarm
payrolls report, and the analysts are divided about their predictions. Some
believe the figure will come in at about 235K, while the other group is
betting on 275K. The previous report indicated 248K jobs in the nonfarm
payrolls.
That wraps it up for this
week.
|
|||
|
|||
|
Realtors' Lender
of Choice! |
|||
|
Copyright
2008 The Daily Communicator
|
Subscribe to:
Posts (Atom)